NTC wants lower access charges for text, calls

Regulators want access charges for voice and short-message service (SMS) cut further to reduce telecommunications cost.
The charges are the amount paid by a carrier for every minute of call or SMS that passes through the network of another.
At present, the access charge for SMS is 35 centavos per text and P4 per minute on voice calls between cellular networks with separate networks.
Based on current SMS rate, which is as low as 15 centavos per text within the respective networks of cellular firms and P1 for interconnecting carriers, the National Telecommunications Commission (NTC) is proposing that access charge should not be higher than 25 centavos per SMS on the first year of the effectivity of the proposed memorandum circular; a maximum of 20 centavos on the second year; and not higher than 15 centavos on the third year onward.
If this is implemented, NTC Director Edgardo Cabarios said a text message would cost only 50 centavos each on the first year; 30 centavos on the second year; and 20 centavos on the third year of implementation.
The retail price of SMS consists of the cost of the network sending the short message, the cost of the network receiving the text, and the cost of the interconnection facilities.
This proposal is meant to ensure that the cost of SMS is made even more affordable to the general public as SMS is widely used in day-to-day activities, the NTC said.
Further, the NTC directs cellular firms to ensure that their facilities are sufficient to guarantee that 99 percent of SMS sent are received by the addressees within 30 seconds from the time the text was sent.
Cellular firms handle about 800 million text messages daily.
For cellular voice calls, the interconnection charge between two separate networks shall not be higher than P2 per minute during the first year of the effectivity of the circular; not more than P1.50 on the second year; and a maximum of P1 on year three onward.
Interconnection rates to mobile-service operators in the Philippines remain one of the highest in the region, the NTC noted. In Thailand and Malaysia, the charges range from P1.36 to P1.70 per minute and P1.24 to P1.30 per minute, respectively.
Cabarios estimates that cellular voice calls will be reduced between P3 and P4 per minute on the first year; P2 per minute on the following year; and P1 per minute on the third year onward.
Today a minute of cellular voice call rate is pegged at P6.50.
Mobile-phone interconnection rates were last adjusted in 2003.
“The country’s 85 million cellular-phone subscribers stand to gain from the [memorandum circular’s] thrust of reducing interconnection charges on voice call and SMS,” the NTC said.
A public hearing is scheduled on July 4.
During the Arroyo administration, the Department of Transportation and Communications (DOTC) had directed the NTC to reduce the interconnection charges to 15 centavos for SMS and to P1.50 for cellular voice calls.
But the plan was shelved on fears that the phone firms may remit lower taxes. The country’s major phone firms also rejected the plan.

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